Irda Asks Sahara Life To Redo Licence Application

Sahara Life Insurance has become the first insurance licence applicant to be asked by the Insurance Regulatory and Development Authority (Irda) to rework its application.

In its application, the company had listed individuals as promoters which the insurance regulator objected to, saying the promoters have to be Sahara group companies. The company is, however, yet to come back to Irda with a fresh application, sources in the regulatory body said.

Sahara executives refused to comment on the issue. "We are in discussions with them. Sahara's application has been pending with the regulator for nearly seven months. Of late, Irda has been taking about three months for processing an application before issuing a licence," they said.

 

In the application, Sahara Life had proposed an initial paid up capital of Rs 125 crore. A few years ago, Sahara had also proposed to enter the general insurance business but that plan has been shelved.

Other than Reliance, Sahara is the only group which has decided to venture on its own into the insurance business. Bajaj had initially filed an application to set up an insurance company alone but later roped in Allianz as a partner.

According to the registration norms issued by Irda, any applicant registered under the Companies Act, 1956, can approach the regulator for a licence. The applicants also have to specify the names of directors and the sources of funds that would contribute to the share capital.

The guidelines also stipulate that in case of an application being rejected by the insurance regulator, an applicant can re-approach with a fresh request only after two years from the date of rejection. But the fresh applicant will need a new set of promoters and has to enter a class of business other than the originally proposed one.

The other two applications pending with the regulator have, however, been finalised and the licences will be issued shortly, senior Irda officials said. The applications are of Dabur CGU and AMP Sanmar.